Copy Trading

Jörg Oechssler, Simon Weidenholzer and Jose Apesteguia

No 1048, Working Papers from Barcelona School of Economics

Abstract: Copy trading allows traders in social networks to receive information on the success of other agents in financial markets and to directly copy their trades. Internet platforms like eToro, ZuluTrade, and Tradeo have attracted millions of users in recent years. The present paper studies the implications of copy trading for the risk taking of investors.Implementing a novel experimental financial asset market, we show that providing information on the success of others leads to a significant increase in risk taking of subjects. This increase in risk taking is even larger when subjects are provided with the option to directly copy others. We conclude that copy trading leads to excessive risk taking.

Keywords: social networks; experiment; copy trading; financial markets; imitation (search for similar items in EconPapers)
JEL-codes: C91 D81 G12 G20 G41 (search for similar items in EconPapers)
Date: 2018-08
New Economics Papers: this item is included in nep-exp and nep-mst
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://bw.bse.eu/wp-content/uploads/2018/08/1048-file.pdf (application/pdf)

Related works:
Journal Article: Copy Trading (2020)
Working Paper: Copy trading (2019)
Working Paper: Copy Trading (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1048

Access Statistics for this paper

More papers in Working Papers from Barcelona School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Bruno Guallar ().